The stability of eukaryotic messenger RNA (mRNA) is regulated in part by co-transcriptional and posttranscriptional modifications that include capping, splicing, and polyadenylation. The 5' m7GpppN cap is the first co-transcriptional mRNA modification made during transcription and is required for efficient premRNA splicing, export, stability, and translation. Capping is catalyzed in three enzymatic steps by RNA triphosphatase, RNA guanylyltransferase, and RNA (guanine-N7) methyltransferase and the capping appartus is recruited to the transcription complex by direct interaction with the phosphorylated C-terminal domain of the largest subunit of RNA polymerase II (RNAPII). Interactions between the capping apparatus and RNAPII are also involved in activation and repression of transcription initiation and elongation, the details of which are poorly understood. We propose to illuminate important determinants and regulatory elements for eukarytic mRNA processing and transcription through Aim 1) structural and genetic analysis of cap forming enzymes in complex with one another, in complex with RNAPII, in complex with the phosphorylated RNAPII CTD; Aim 2) the structural, genetic, and biochemical characterization of CTD interacting proteins that include mammalian capping enzymes and yeast CTD phosphatase and methyltransferase enzymes; Aim 3) characterization of the Spt4/Spt5 transcriptional elongation complex. The RNA cap structure also plays a critical role in both major RNA decay pathways. After deadenylation of polyadenylated mRNA in the 5'-3' decay pathway, the Dcp1/Dcp2 decapping complex hydrolyzes the mRNA cap to expose the 5' RNA end to 5'-3' exoribonuclease activities. In the 3'-5' decay pathway, exosome-mediated degradation of RNA occurs from the 3' end after deadenylation, ultimately generating a cap structure that is hydrolyzed by enzymes in this pathway. Hydrolysis of the residual cap structure is predicted to eliminate m7G cap intermediates that might serve as potential inhibitors of mRNA translation, export, and processing factors that recognize messenger RNA via the 5' m7G cap. We propose in Aim 4) to illuminate the structural, mechanistic, and regulatory basis-for decapping enzymes in both 5'-3' and 3'-5 RNA decay pathways that mediate interactions with and degrade the 5' m7GpppN cap or capped RNA.